Nasdaq clipped by high-flyers; Dow, S&P end up on Ukraine hopes

Discussing today's sell-off and where value can be found, with Don Schreiber, WBI Funds, and Jim Cahn, Wealth Enhancement Group.

U.S. stocks pulled mostly higher on Wednesday, as Federal Reserve Chair Janet Yellen's testimony did nothing to rattle investors and after Russian President Vladimir Putin signaled a willingness to talk on Ukraine. The Nasdaq Composite, however, remained solidly in negative terrain, as investors continued to cycle out of so-called momentum stocks.

"We had a decent close in Europe, with Russia up almost 4 percent. There was nothing in Yellen's testimony that was new, so I can't point my finger to anything other than Europe bouncing back on hopes that Russia and Ukraine are going to come to the table," Peter Boockvar, chief market analyst at The Lindsey Group, said of the Dow's triple-point ascent.

The Nasdaq Composite remained under water as high-growth shares took it on the chin.

"Even with the froth that has come out of the Nasdaq, it has still outperformed the S&P in the last year, so there is still more to go. Athenahealth and Twitter are still taking on water," said Joe Peta, managing director at Novus, of the companies, both of which declined for a second session.

Athenahealth continued to get hit after hedge fund manager David Einhorn late Monday said investors had vastly overvalued the software company. Shares of Twitter also fell hard for a second session as a lock-up that had prevented insiders from selling expired on Tuesday.

"We've got a healthy release of air from high-growth names," Peta added.

"All the buzz is what technology company is going to blow up. It's a continuation of a trend we've had for six weeks. The Nasdaq is going to be under pressure until this growth-to-value rotation completes its course," said Art Hogan, chief market strategist at Wunderlich Securities.

Dow, S&P rise after assurances from Fed

The markets rose on Wednesday as the Fed signaled it would stay the course on interest rates, while the Nasdaq lagged as the rotation out of tech and other growth stocks continued.

Investors were "watching for any hints of the timing of the first interest rate hike, but I certainly think Janet Yellen has learned her lesson in speaking off the cuff after that six-month comment that jilted the markets," said Hogan.

The strategist was referring to a March news conference at which Yellen told reporters the phrase "considerable time" in regards to how long the Fed was likely to keep benchmark interest rates near zero "probably means something on the order or around six months or that type of thing."

Stocks and bonds stumbled in the aftermath of Yellen's words, which were viewed as suggesting rate hikes could come sooner than previously expected.

On Wednesday, Yellen refrained from stipulating any sort of a date, telling the Joint Economic Committee that "there is no mechanical formula or timetable."

After falling 43 points, the Dow Jones Industrial Average climbed as much as 121 points, and closed near session highs, up 117.52 points, or 0.7 percent, at 16,518.54, with UnitedHealth Group leading gains that included 25 of 30 components.

Initially wobbling on either side of unchanged, the S&P 500 rose 10.49 points, or 0.6 percent, to 1,878.21, with consumer discretionary and technology the worst performing and utilities and financials faring best among its 10 major industries.

Whole Foods Market led declines on the S&P 500, as at least five analysts lowered their ratings on the grocery chain's stock after it reported another disappointing quarter and cut its 2014 earnings forecast again.

"Large-cap portfolio managers are making room for an IPO that's coming by selling high-flyers to put a new high-flyer in; I don't know how big this Alibaba deal gets, but a lot of people want to make room," said Hogan of the Chinese internet company, which analysts say could raise as much as $15 billion to $16 billion when it goes public.

"Gaping up stocks are up 2 to 3 percent; gaping down stocks are down 16 to 18 percent. Good news is taking the stairs up and bad news is taking the elevator down," said Hogan, who listed ReachLocal, Datalink, Aegerion Pharmaceuticals and Zulily as among those getting hammered.

Stocks had started Wednesday's session higher as Russian Putin signaled a willingness to discuss the crisis in Ukraine with regional leaders, saying Wednesday he was prepared to talk about a way out of the Ukrainian crisis with the head of the Organization for Security and Co-operation in Europe, Reuters reported.

"We had a tone change that is corresponding with news that Putin is willing to discuss his way out of the crisis. If in fact the biggest hang on this market is geopolitical, then there's a glimmer of hope here," said Hogan.

Also ahead of the open, the Labor Department reported U.S. productivity fell 1.7 percent in the first quarter, with the larger-than-expected decline the biggest since the first quarter of 2013.